Increased business and Polsinelli’s aggressive recruiting shook up the top three MOney 20 firms for the first time in five years. With more than $324 million in 2013 revenue, Polsinelli leapfrogged to the No. 2 spot this year, bumping Shook, Hardy & Bacon to No. 3 and Husch Blackwell to fourth place in the ranking, which is based on gross revenue.
It’s the first time since Missouri Lawyers Weekly launched the MOney rankings in 2006 that product liability defense firm Shook Hardy hasn’t held the slot under Bryan Cave, Missouri’s highest-grossing law firm. The shift in the gross revenue rankings highlights changes in attorney headcount — and a difference in the firms’ approach to growing business.
Polsinelli has recruited lateral hires by the dozens annually since a 2009 merger of two Kansas City firms created the firm, last year adding 104 attorneys, including 10 attorneys from Husch Blackwell in June.
Polsinelli’s recruiting coincided with the shrinking of Shook Hardy, whose attorney numbers fell by 34 in 2012 with the departure of major client Lorillard and some of the attorneys who represented the tobacco company.
Polsinelli and Shook Hardy chairmen both said growth isn’t just about the headcount, a view reflected in revenue-per-lawyer figures.
Husch Blackwell early last year lost seven attorneys to the Kansas City office of Dentons in addition to those who moved to Polsinelli, but it more than made up the difference with a 2013 mid-year merger. The firm added 65-attorney Texas firm Brown McCarroll.
Polsinelli and Shook Hardy chairmen both said growth isn’t just about the headcount, a view reflected in revenue-per-lawyer figures. Adding attorneys may not boost revenue per lawyer, which places a dollar value on the average production of an attorney.
“Our goal is not to add numbers for numbers’ sake,” Polsinelli Chairman Russ Welsh said. “The fact that as revenue overall has grown, revenue per lawyer has grown, is a strong indicator of that.”
Polsinelli’s revenue per lawyer has grown 28 percent since 2009, to $526,000 last year. A “pretty high” demand for work spread out over the entire year in multiple practices aided the RPL, Welsh said. Strong practices included real estate, health care and commercial litigation.
Husch Blackwell’s revenue per lawyer has steadily grown since 2009, but at a slower rate, increasing nearly 10 percent in that time to $560,400. But both still are far short of Shook Hardy’s figure of $699,400 last year, a decline from $723,300 the previous year.
“Hey, there’s lots of things that contribute to revenue per lawyer,” Welsh said. “If rates are higher, it will contribute to revenue per lawyer.”
Shook Hardy Chairman John Murphy attributed the firm’s comparatively higher revenue-per-lawyer figure to the type of work the firm does, with complex litigation featuring prominently. It took “vastly different numbers of lawyers” for the three firms to reach gross revenue in the $300 million to $325 million range, Murphy said.
Shook Hardy, which had $308 million in gross revenue, had 441 full-time equivalent attorneys in 2013. FTE numbers take into account how long an attorney has been at a law firm. Polsinelli’s FTE attorney headcount was at 617.
As for the revenue and revenue-per-lawyer decline from Shook’s previous year, the exit of the Lorillard business had a “slight impact,” he said. Shook also faced the same pressure applied to other firms by the economic times, Murphy said — a squeeze on rates leading to discounting and alternative fee arrangements.
Unlike Polsinelli and Husch Blackwell, Shook hasn’t had any major merger tie-ups in decades. The firm prefers to grow organically, adding young attorneys and keeping the gates wider open for promotion to equity partnership to ensure they’ll be at the firm a long time, Murphy said.
Shook’s main goal is to continue to attract profitable business, Murphy said.
“I’m not bothered by revenue,” he said.